TRADE AS A TOOL FOR DEVELOPMENT;
HOW CAN DEVELOPING COUNTRIES BENEFIT
MORE FROM THE MULTILATERAL TRADING SYSTEM?
ITC firmly believes in trade as a tool for development.
In order for developing countries and transition economies to increase their
participation in global trade, they need to focus on three export
prerequisites: market access, marketable goods and services to export and
export skills.
A great deal is being said about globalization and what developing
countries and transition economies should do to participate more fully in the
world economy. But what specifically needs to be done? In my view, there are
three pre-requisites to enable developing countries to fully participate in the
world economy. They are:
·
market
access;
·
goods
and services to export; and
·
export
skills.
Changing Scene
Market access is negotiated between countries. In the
past it has often been difficult for developing country suppliers to obtain access
to markets in industrialized countries, which have tended to favour their own
country’s suppliers. This is changing. Recent initiatives by the European
Union, the United States and the Fourth World Trade Organization (WTO)
Ministerial Conference in Doha, Qatar in November are providing new impetus to
substantially increase market access for developing countries in areas where
they can best compete.
The second requirement is having marketable goods and
services to export. These result from creativity, innovation, technology and
capital investment which are critical elements for success.
Creativity exists in abundance in developing countries.
Indeed, time and time again, these countries have found highly innovative and
imaginative ways to tackle situations that are dealt with more traditionally by
industrialized societies. Putting this capital of imagination and creativity to
work for export is something developing countries need to do more
systematically.
The cost of access to technology, particularly new
information technology (IT) is falling all the time. Last year, the Executive
Forum organized by ITC in Montreux, Switzerland, focused on “Export Development
in the Digital Economy”. It gave plenty of examples of developing country
exporters who have entered world markets through the creative use of
information technology.
The Key: Good Ideas
Capital is equally important. Even in these difficult
times, it is interesting to see how much capital from around the world is being
directed at seeking out good ideas, large numbers of which will be found in
developing countries.
I believe this is a trend that will both continue and
strengthen in coming years. There was a time when big firms, or big fish (for
the sake of illustration) used to eat small fish; nowadays fast fish eat slow
fish and these fast fish are found in both North and South. Fast fish are the
result of creativity, innovation, technology and capital.
In my view, this is where developing countries have a
unique opportunity to win a greater share of the global economy. ITC can help
these countries improve their responsiveness to new demands by assisting with
identifying new markets, pointing to opportunities to adapt and diversify
products and by focusing entrepreneurs’ attention on the export potential of
the services sector, which is one of the fastest-growing areas of world trade.
This will be further enhanced by the use of appropriate information
technologies. As a result of improved telecommunications coverage, it is
foreseen that increasingly many call centres, back office services, information
services, as well as data-entry and processing functions will be located in
developing countries.
Export Skills
The third requirement for countries to be able to succeed
in export markets is possessing both export skills and the ability to deliver
export products and services. These are just as important as market access,
since on its own, market access makes little difference. Despite the market
privileges they have been granted for years, the poor performance of African,
Caribbean and Pacific countries in European markets brutally reminds us that
gaining market access alone is not sufficient.
Strengthening Links
Trade development also involves more than just export
promotion. Evidence suggests that in successful economies, trade support
extends to attention to exporters’ supply chain operations and issues, which
usually takes the form of dialogue with supply support institutions.
Export capability is only as strong as the weakest link
in the chain. This may seem to be a logical assumption, but few developing
country enterprises give it much attention until their first supply or delivery
crisis arises.
All contributors to the export supply process share the
responsibility for good export performance and dependable delivery. Each
exporter effectively acts as an ambassador to the outside world for the
country’s industry and products. Poor performance or misleading actions will
affect the reputation of all suppliers in the country, making it much harder to
win the next export deal. Increasingly, buyers set quality and other standards,
the effects of which extend upward to an exporter’s suppliers and across to
associated trade services such as packaging, insurance, warehousing and
transportation.
Domestic suppliers of services and materials must be
involved in information-sharing and learning processes. In this area, since we
cover both the export promotion and supply chain operations aspects of
international trade, ITC is uniquely placed to help enterprises and trade
support institutions in developing countries and transition economies.
ITC’s Tools For Trade
Following on from the importance of market access and
exportable goods and services, the next focus needs to be on export delivery
skills. During almost forty years of hard work with developing country
exporters, ITC has learned a number of lessons about things to do and things to
avoid. We have incorporated these experiences into a series of products, or “tools
for trade”.
ITC’s tools for trade help entrepreneurs improve their
export skills by helping them identify goods and services for export; by
providing assistance with selecting niche markets; and by guiding the
international marketing effort.
We do this by providing training in all aspects of
exports, including trade financing, quality standards, packaging, trade laws,
marketing, international supply chain management, using new information and
communications technologies and by providing improved strategies to promote
export services successfully.
Involve the Private Sector
One of the key elements for success is the existence
of a solid national export strategy. Furthermore, to make this trade strategy
effective, the private sector must be drawn in and totally involved and
committed to the overall process. This requires more than mere consultation;
the private sector must be a full participant in every step of the process. In
other words, it must “buy in” and feel jointly responsible for the success or
failure of the strategy. The public sector cannot do it alone. There must be a
real and effective partnership between the public and private sectors in this
process. This does not happen easily in any country. Mistrust between public-
and private-sector institutions is frequently found throughout the world. This
mistrust has to give way to understanding, trust and genuine collaboration.
Effective collaboration between the private and public
sectors will avoid the occurrence of unnecessary obstacles to trade and
inefficiencies in export processes. The examples of other nations show that all
successful exporting countries have developed intense public-private teamwork
and strong information-sharing networks covering the entire export supply chain
from marketing to fulfilment.
Finally, while it is clear that export skills can
certainly be acquired, they do not just materialize without effort.
Determination to succeed and perseverance are essential. Export is a game and,
like any other game, no one can become a champion without practising intensely.
Trying, failing and trying again is part of the game. Part-time players never
become champions, but those who take the game seriously and play it hard and
long enough, do become champions. ITC will always be pleased to help future
champions to the maximum of its ability.
* J. Denis Bélisle is ITC’s Executive Director. This article
draws from the speech he gave at the Global Economy Seminar in Egypt (Cairo, 3
October 2001).
** International Trade Forum, Issue 4/2001,
pp.4-5.
*** Required permission for
re-publication was taken from the ITC. The translated Turkish version of the
article is available at: http://www.akademiktisat.net/calisma/dis_ticaret/gelisme_ticaret_gou.htm